The presentation was held by Tom Listowski, Partner, Head of Industrial Poland & CEE Corporate Clients and Joanna Sinkiewicz, Director, Head of Key Clients & Tenant Representation at Cushman & Wakefield.
The ‘manufacturing risk index’ is an annual survey of the manufacturing sector, assessing how political, economic, technological and environmental risks are managed during portfolio assessment and site selection by occupiers. The report contains an Established Index which ranks the 30 largest countries by manufacturing output and a Pioneering Index which measures the attractiveness of less mature markets where manufacturers are seeking lower operating costs. According to the report, the manufacturing sector is at the centre of a period of great change with far reaching implications for businesses across the global industrial landscape.
Asia-Pacific countries continue to dominate the top 10, occupying seven places within the top half of the Established Index. When examining Europe region, the report shows that the market overall has remained relatively stable in the past 12 months. Going forward, the implications on tariffs and trade as a result of the UK’s decision to leave the European Union will be an important challenge for the manufacturing sector. The weakening of sterling has held up the sluggish market in the UK itself and as yet there is no prospect of modern production facilities being relocated or closed purely due to the result of the Brexit vote.
Looking at the market as a whole, the report states that in the short term, manufacturing remains partly constrained by a lack of capital investment in plants, reducing near-term radical shifts in location decisions. However, in the medium term, many questions will be raised about locations that fundamentally service a different era as the sector migrates into what management consultancy McKinsey has called Industry 4.0, which places a greater emphasis on emerging technologies. As a result of the findings from this report Cushman & Wakefield anticipates different criteria becoming more important to future decision making.
Tom Listowski presented the changing trends and dynamics of the major global manufacturing locations and the fundamental challenges which companies face when deciding where to locate manufacturing facilities in the future. He also pointed out that Poland’s consistently high ranking over the last several years (#13 out of 30 countries globally) is underpinned by the record high levels of industrial activity witnessed in 2016, re-iterating the positive attributes and foundations Poland holds in not only attracting new manufacturing operations but also supporting the expansion plans of global companies with already established platforms.
In the second part of the meeting, Joanna Sinkiewicz presented the data according to which Poland’s total industrial and logistics stock surpassed the 11 million sq m mark at year-end 2016. Leasing activity remained strong for another consecutive year, leading to record high take-up, with more than 3 million sq m being transacted. The largest leasing volumes were recorded in Warsaw’s suburbs and Upper Silesia, and – of the smaller markets – in Szczecin and Bydgoszcz-Toruń.
Warehouse take-up hit a record high in 2016 with a 25% increase compared to the previous year’s figure, driven largely by logistics operators (32%), the FMCG sector (12%), e-commerce (11%), automotive companies (8%) and light manufacturing (6%). The largest leasing volumes were recorded in the Warsaw region (760,000 sq m) and in Upper Silesia (494,000 sq m). Strong occupier activity was also noted in Wrocław (355,000 sq m), Poznań (340,000 sq m) and Central Poland (307,000 sq m), and in smaller regional markets such as Tricity (97,000 sq m) and Krakow (89,000 sq m). Improvements in road infrastructure have benefited emerging markets which saw record high take-up levels, including Szczecin (338,000 sq m) and Bydgoszcz-Toruń (128,000 sq m). New lease agreements and extensions accounted for 69% of the total leasing volume with renegotiations making up 31%.
During the meeting the participants also had a discussion about availability and high quality of labor pool in Poland, e-commerce potential and its impact on Polish industrial market, as well as Poland’s competitiveness in the dawn of Industry 4.0 revolution.